Transitioning from Grants to Government Contracts

If your organization has long relied on grants and those funding streams have recently been cut or reduced, you might be wondering what’s next. One thing we’re starting to see in the procurement world is the pivot from federal grants to federal government contracts. Some organizations that have previously relied on grants are turning to government contracts for additional ways to increase revenue. In this blog, we’ll walk you through the key differences between grants and contracts, help you assess your readiness, and help you understand the process of getting a government contract.

Why the Grant-Funding Landscape is Changing

Recent data shows that grant-funded organizations are feeling the pressure to find alternative streams of revenue. While exact numbers vary by sector, many nonprofits and research institutions report disrupted funding due to changes in funding and priorities under the Trump Administration.

On the flip side, federal contracting is being emphasized as a growth path for small and midsize organizations. While federal procurement has seen a lot of change under the Trump Administration too, vehicles like the GSA Multiple Award Schedule (MAS) Program are expected to increase in popularity and size under new directives. We’ll talk more about this program below.

Grants vs. Government Contracts

Before we launch into the “how” part of the blog, it’s important to establish the key differences between grants and government contractors so you know what you’re walking into. While both are government funded, they are very different in nature in how they are acquired and operated. But don’t worry—there are some similarities too. If you’ve applied for a grant before and had to deal with certifications, compliance, registration, or a rigorous application and proposal process, you already have some experience in government contracts.

The chart below highlights the key differences between federal grants and federal contracts:

If your organization has built its model around grants, it’s clear from the table above that you’ll need to reposition yourselves for a more stringent set of rules and regulations. You may also need to familiarize yourself with replying to Requests for Proposals (RFPs) and other solicitations.

Transitioning from Grants to Government Contracts

Even if you’ve never pursued a federal contract before, moving from grants to procurement doesn’t have to be an impossible task. Many organizations that operate under grant funding are surprised to learn how much of their experience translates directly into contracting expectations.

The first place to start is understanding the federal market to see if government buyers are interested in what your organization can offer. Tools like SAM.gov contracting tab, USAspending.gov, and agency procurement forecasts like the Acquisition Gateway can help you spot patterns, identify relevant agencies, and understand the types of products or services currently being purchased. For many organizations looking to replace lost grant revenue, this research often points toward the GSA Multiple Award Schedule (MAS) Program.

The GSA MAS Program is the most widely used and popular vehicle within the federal government right now, and it also includes opportunities to sell to State, Local, and Educational (SLED) institutions right now. So, if your experience is mostly SLED or federal, you can find opportunities within both sectors.

GSA MAS Program Basics

For organizations new to contracting, the GSA MAS Program is a great way to enter the federal marketplace. The MAS Program is a long-term, government-wide contract vehicle that pre-approves your pricing, offerings, and terms/conditions so federal agencies can purchase from you more easily and quickly.

Eligibility for the MAS Program

While this program is built to be accessible for commercial companies of all sizes, it’s not for every organization. GSA has some pre-requisites to be a contractor through the MAS Program. These include:

• Must be in business for 2+ years (unless you qualify for the  Startup Springboard Program)
• Must be registered entity in SAM.gov
• Products/Services are Trade Agreements Act (TAA) compliant
• Relevant Past Performance
• Sell your solutions commercially

If you do not meet all of these requirements, or you are looking to have some more support before you get a prime contract of your own, you can also consider partnering with a GSA Reseller.

State, Local & MAS Opportunities

While the main focus here is transitioning from federal grants to federal contracts, we don’t want to overlook state and local procurement opportunities. The GSA Multiple Award Schedule Program can open doors across federal, state, and local agencies as well through programs such as Cooperative Purchasing for IT and Security Products, and Disaster Purchasing to support disaster preparedness and response.

Common Problems Transitioning from Grants to Contracts

Since government contracting may be a very new territory for you, it’s natural to make mistakes. We’ve identified some common mistakes organizations can make when pivoting to the world of procurement.

• SAM Registration: You MUST register your entity in the System for Award Management (SAM) before you start the government proposal process. Any company that wants to do business with the federal government must have a Unique Entity Identifier (UEI) through SAM.gov. Start this process early in case you run into roadblocks or delays.
• Pricing: Pricing for your GSA Schedule offer or any other government contract is a complex but very important part of the proposal. GSA and other agencies are looking for best value and “fair and reasonable pricing”. Be sure to perform market research and have invoices prepared to support your proposed pricing.
• Ignoring past performance: In federal contracting, past performance is a major evaluation factor. Many companies focus on past performance that isn’t entirely relevant to their offerings. Make sure you are highlighting work that makes sense for what you plan to offer the government.

Do You Need Help Getting a Government Contract?

We know that even though you may have a better understanding of government contracts and whether you want to explore this path now, there’s still a lot to learn. If you want to learn more about government contracting and the GSA MAS Program, check out our blogs:

• The GSA Schedule Acquisition Process From Start to Finish
• Common Problems Filling Out the GSA Schedule Proposal
• Using Your MAS Contract to Win State and Local Business

If you have any questions about getting a GSA MAS contract, partnering with a reseller, or would like help getting your own contract, we are here to help.